AD Banker Ch 3 Guide + Test Questions

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1.A(n) ____________ is a civil wrong committed by one person against another. Tort

A tort is a wrongful act for which compensation may be sought from the responsible party.

2.Which of the following damages is awarded to the injured party for the actual medical expenses incurred? Special

Special damages are paid for tangible losses and general damages are paid for damages that cannot be objectively calculated, such as pain and suffering.

3.Payment of necessary medical expenses without regard to negligence is covered by which of the following insurance coverages? Medical Payments

Medical payments will also pay for surgical, x-ray, dental, ambulance, hospital, nursing, and funeral expenses incurred by a third party on the insured’s premises.

4.Which of the following document reports how and when a loss happened?Notice of Loss

The proof of loss also includes the interests of all insureds and other parties and other insurance that might cover the loss.

5.Each of the following is an element of negligence, except: There is an intervening cause

The fourth element is “violation of the duty is the proximate cause.” It is not necessary to have an intervening cause.

6.Which of the following is a common law defense used by the plaintiff when the injured party is partially responsible for his own injuries?Contributory negligence

If the insured can prove that the claimant was negligent to any degree in causing the accident, contributory negligence will prevent recovery of damages by the claimant.

7.Which of the following is designed to prevent the insured from collecting more than the actual extent of a loss?Pro rata liability

Pro rata liability is a clause that in the event more than one insurance policy covers a loss, each will pay its share of loss in proportion to the total insurance on the risk.

8.The ___________ is the most the policy will pay for the sum of all the losses occurring within a policy period. Aggregate

Under an aggregate limit, the payment for an accident during a policy period reduces the amount of insurance available for all future accidents that occur for the remainder of the policy period.

9.The ____________ limit of liability applies to either bodily injury or property damage or both. Combined Single Limit

The combined single limit pays for any coverage wherever needed or in any combination.

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Chapter 3 Test

1.Which of the following is NOT a possible defense against negligence? Doctrine of subrogation

Contributory negligence, comparative negligence, assumption of risk, intervening cause and statute of limitations are defenses against negligence. Each State Legislature will determine what defenses they will permit to operate within the state. Subrogation is not a defense, it is an insurers right to subrogate and seek reimbursement for damages from the at fault party.

2.Which of the following lists all the required elements for establishing a charge of negligence? Legal duty owed, breach of legal duty owed, proximate cause, damages

Negligence is the failure to exercise the degree of care required to protect others from an unreasonable risk of harm. To establish negligence, four factors must be involved: legal duty owed, breach of legal duty owed, proximate cause, and damages.

3.A death caused by an insured either by negligence or purposefully would be covered by which of the following? Bodily Injury

BI covers the insured for legal liability arising from physical injury to a person including sickness, disease or death caused by the negligent or purposeful acts of an insured.

4.Which of the following terms describes what applies when an insureds 13 year old daughter intentionally vandalizes a neighbors house? Vicarious liability

A parent and/or an employer is Vicariously liable for the acts of their children/employees actions.

5.Which of the following is NOT negligence? A deliberate act

Negligence is considered to be any Unintentional Tort or Act. Anything deliberate would be considered an intentional tort.

6.A demolition company is using dynamite to destroy an old downtown building. Which the following applies? Absolute Liability

Absolute liability is a doctrine that applies on activities that present an extreme likelihood of harm to others when mishaps occur. Example: Contractors in blasting operations, Owners of wild animals held in captivity, etc.

7.Legal duty owed, Breach of legal duty owed, Proximate cause and Damages are all elements in determining which of the following? Tort of negligence

The 4 Elements of determining the tort of Negligence are: LBPD - Legal Duty Owed, Breach of Legal Duty Owed, Proximate Cause, and Damage or Actual Loss.

8.Which of the following is a liability loss? A fire that was caused by the insured's negligence burns a neighboring building; the owner of the building sues the insured

A liability loss is one that arises out of a person's actions toward other people or their property. The losses described in the other answers involve the insured's own property.

9.What is it called when a manufacturer of a product is held responsible for any injuries or damages sustained by their products, regardless of whether the product was defective and where duty or guilt is not a factor? Strict liability

Manufacturers of products are held strictly liable for the damages or injuries caused by their products regardless of guilt or duty.

10.Negligence is: An unintentional tort

Another term for an unintentional tort is negligence. Negligence is the lack of reasonable care that is required to protect others from the unreasonable chance of harm.

11.Personal Injury includes all of the following, EXCEPT: Bodily injury

BI is physical injury, Not personal injury. Personal Injury and Bodily Injury can NEVER be used together. One is attacking the character and reputation and the other is physical injury to an individual.

12.All of the following are areas of law under which a person can be found liable for injury or damage to another, EXCEPT: Intervening cause

Intervening cause is considered one of the defenses against liability, similar to assumption of risk. These both place some if not all of the risk back on the individual, such as: a person provoking a dog causing it to bite or defend itself. Negligence, absolute and vicarious liability are all areas of law under which a person can be found liable for injuries or damage to another.

13.You are hit by a Greyhound bus. This incident is: Both an accident and an occurrence

All accidents are Occurrences, But NOT ALL Occurrences are Accidents.

14.In Liability policies, Supplementary Payments are: Payable in addition to the policy limit of liability

Supplementary payments are paid in addition to the limits of liability that apply for bodily injury or property damage. They apply to both intentional and unintentional torts. It pays regardless of whether or not legal liability is proven.

15.Which of the following is a third party contract? Casualty

Casualty or Liability is considered to be a third party contract. 1st party is the insured (defendant), 2nd party is the insurance company, and the third party is the claimant (plaintiff). Property insurance is a two party contract

16.All are necessary elements in establishing negligence, EXCEPT: Intervening Cause

The 4 Elements of determining the tort of Negligence are: LBPD - Legal Duty Owed, Breach of Legal Duty Owed, Proximate Cause, and Damage or Actual Loss.

17.All of the following types of damages will indemnify the claimant in the event of a covered loss, EXCEPT: Punitive damages

There are 2 types of compensatory damages: Special (aka) specific damages and General damages. These compensate or indemnify (restore) an individual for actual damages. Punitive damages are punishment. These do not compensate and are considered to be non-compensatory damages.

18.A parent is responsible for the acts of their children just as an employer is responsible for the acts of their employees is an example of which of the following?Vicarious Liability

Vicarious liability is when one person is liable for the acts of another. Example: A parent is vicariously liable for the acts of their children and employers are liable for the acts of their employees.

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